The forecast for San Francisco this week calls for clouds - as in the computer variety.

There will be lots of talk on the streets and in the bars about this current mega-trend in enterprise computing - computer systems that run on remote data centers over the Internet - as more than 50,000 registered attendees are expected to descend on Oracle Corp.'s 30th annual OpenWorld user conference.

The five-day affair kicks off Sunday evening with the first of two keynote addresses by Oracle Chief Executive Officer Larry Ellison, who is expected to introduce the company's first version of its new 12c database (the "c" stands for cloud, of course). It is the company's first major revamp of its core database business in several years.

The database upgrade is partially in response to German firm SAP's introduction of a hardware appliance, Hana, which could evolve into a competitive threat.

Databases, which account for about 48 percent of Oracle's revenue, are the company's flagship products. But the company more than doubled in size over the past decade as result of a well-executed acquisition of mostly business software companies in almost every niche imaginable. Since its hostile takeover of PeopleSoft in 2005, Oracle has spent more than $50 billion buying up more than 80 companies, including high-end hardware giant Sun Microsystems. Oracle is now the largest purveyor of business software in the world, surpassing SAP.

"We are sitting on the most powerful software portfolio in the world," Oracle Co-President Mark Hurd told Barron's business magazine this year.

Fewer servers needed

Oracle, now in its 35th year, is also expected to reveal new computer servers tailored to cloud-friendly data centers, which presents a tricky proposition for Ellison.

When taken to the extreme, cloud computing involves using fewer servers in off-premise data centers scattered all over the world. The computing power is dispensed like a utility - not unlike electricity - over communication cables and wirelessly, reducing the need for corporate customers to buy computer servers.

Thus, it remains to be seen if Ellison can successfully sell more hardware while simultaneously rolling out cloud services, called infrastructure as a service or IaaS, which he is also expected to do this week. Amazon Web Services and Google are among the larger players in this business segment.

Variety of services

Selling hardware as customers shift to the cloud won't be easy, but it isn't impossible either. In reality, there are myriad versions of cloud computing, and corporate customers are generally getting their feet wet one toe at a time.

For example, some companies opt to use public cloud services, where they don't own the hardware at all, for noncritical functions. But for strategic parts of their businesses, companies use what are called private clouds for mission-critical aspects of their operations. Private clouds are data centers owned and maintained by the corporations themselves, but they utilize the cloud-friendly technology, design and software that make data centers more efficient.

Banks and brokerages, for example, are big devotees of private clouds but are very reluctant to share their operations in public clouds, which bodes well for hardware sales. But Oracle must still compete with Hewlett-Packard, IBM, Dell and others for its slice of the shrinking hardware pie.

Competitive field

Meanwhile, in addition to competing with traditional rivals for hardware and software sales, Oracle is facing a fight on multiple fronts against other emerging technologies.

Those include new generation software as a service, or SaaS, companies such as San Francisco's Salesforce.com and Pleasanton's Workday, a startup human resources outfit begun by the same executives who built PeopleSoft.

Ellison's early funding of Salesforce.com, which has become a major rival, has been well documented. Salesforce CEO Marc Benioff, who is an Ellison protege, concluded his own mammoth user conference in San Francisco this month. Hedging his personal bets, Ellison is the majority shareholder in NetSuite, which is an enterprise SaaS play.

All of this will not be lost on those attending OpenWorld. When not busy wining and dining its customers and developers, Oracle will try to convince its guests that it has an arsenal of modern middleware and updated business applications that can provide broader, more flexible and more secure cloud solutions than any other tech outfit. Ellison and company will argue that they can provide what they want and how they want it: private clouds, on-premise clouds, public clouds - or a combination of all three.

Updated applications

Oracle will also make clear that it continues to add SaaS to this arsenal through homegrown products and recent acquisitions, such as employee management software's Teleo and sales automation outfit RightNow. Already, Oracle already racks up about $1 billion in SaaS revenue, making it the second-largest enterprise SaaS provider in the world behind Salesforce's $3 billion, the company says.

Oracle sales execs will also try to sell existing customers updated business applications called Fusion. During his second keynote, on Tuesday, Ellison is expected to tout new lines of hardware appliances (Exadata, Exalogic and Exalytics) that help companies fetch, slice, dice and analyze their stored information faster than their existing systems.

Oracle wouldn't disclose its costs for the huge conference, which is centered at Moscone Center and spread over other 14 venues. But Chief Marketing Officer Judith Sim considers it a "huge investment" in Oracle's customers and users.

Boon for hotels, stores

It's also a huge investment in San Francisco. While user conferences have become de rigueur, many Bay Area technology companies opt to hold their events in such places as Las Vegas, Anaheim or Orlando, which are generally less expensive.

Sim says the city appreciates Oracle's commitment to San Francisco and that it has worked closely with the company to accommodate the event, including the closed of portions of Howard Street to the disenchantment of locals. The conference is a huge boon for hotels - 100,000 hotel nights are booked - restaurants, cabs and retailers. A study commissioned by the city pegs the economic benefit at $120 million.

"It has a pretty huge impact on the city," Sim says.

While top-shelf musical acts have been fixtures at previous events, new this year is a five-day music festival featuring up to three acts daily at multiple venues. The highlight is sure to be headliner Pearl Jam on Wednesday night at a temporary outdoor amphitheater on Treasure Island.

Expect a chance of clouds.

Oracle OpenWorld

When: Sunday through Thursday.

Where: Moscone Center and more than a dozen other San Francisco locations.